Finance and Economics Discussion SeriesDivisions of Research & Statistics and Monetary AﬀairsFederal Reserve Board, Washington, D.C.
Inequality and Poverty in the United States: the Aftermath of the Great Recession - July, 2013
Washington U faculty papers
Inequality, the Great Recession, and Slow Recovery - Jan, 2014
What do these data mean to you?
To me, they're simply interesting data, produced too slowly to be of functional use in a still missing RESPONSE to changing context.
What are we doing here? How are we doing it? And why are we waiting so long?
Instead of documenting the bad outcomes, why aren't we just focussing on improving policy in real-time?
Something is completely out of whack in our policy apparatus, and our civics.
We would NOT use economics to train jugglers! Why try to use them to advise policy development - which must, by definition, be either agile, or irrelevant?
No offense to economists ..... but the entire field of economics could - eventually - precisely document how every war was lost, but couldn't EVER actually win one, since that requires practice at a different skill set?
This situation should make all citizens realize that the economics profession can never instruct us on how to ride a bicycle. It can only precisely document (eventually) why we fall off? :)
Let's get real. The act of falling off a bike is self-documenting.
As are depressions.
Keeping all feedback data sets within tolerance limits is how complex systems juggle internals in order to survive context. To ALWAYS ensure that ALL internal functions can be kept within local tolerance limits, we
1) generate tremendous diversity, and
2) generate large numbers of inter-dependencies, and
3) demand distributed - i.e., "fiat" - adjustments to adequately distributed feedback,
That is what agile aggregates, and Democracies, do - when they survive.
The logic of social species is to guarantee survival of all components PLUS the aggregate, by distributing all stresses experienced by the aggregate. If all components adjust a little, then no component EVER need be stressed beyond survival tolerance limits.
So why on earth are we killing our MiddleClass? Is there a plan? Some Desired Outcome? Whose?
Social organization boils down to building aggregate agility by continuously tuning increasing numbers of inter-dependency functions. That's not rocket-science, only distributed PLUS aggregate practice at tuning inter-dependencies.
Where does the field we call economics fit in this social logic?
Just set functional tolerance limits for all components ... including education, nutrition, liquidity, employment .... and let distributed, not concentrated, adjustments be mediated through existing and added Automatic Stabilizers. It should be easy.
Accounting & economics involve fairly boring tracking of basic fundamentals, and NOT dynamic exploration of emerging options.
Our survival is a simple question of keeping boring fundamentals separate from the emerging options which we must explore?
That means setting goals, keeping boring fundamentals as fundamentals vs dynamics, and making any and all distributed adjustments IN REAL TIME, that are necessary for aggregate exploration of aggregate options.
Once seen that way, our key Desired Outcome is to maintain aggregate resiliency precisely by maintaining all of our social components - and especially our Middle Class - safely within operational tolerance limits.
If all citizens focus on avoiding application of excessive stress on other citizens, then we'll never have to worry about our aggregate resiliency. That is the logic of all aggregates.
It is the logic of social species.
It's also the logic of statistical process control (distributed control of net variance).
And the logic of diverse expressions of military science (force readiness by managing frictions generated while aligning highly distributed decision-making). Believe it or not, armies at war are much more democratic than our electorate at home.
And, by the way, it is the logic of using automatic stabilizers in fiscal and social policy.
In conclusion, to maintain National Security as national resiliency, functional policies are those that
Building Aggregate Agility ... By Continuously Tuning Increasing Numbers of Inter-Dependency Functions ... With Increasing Numbers of Automatic Stabilizers.
That is what evolving systems do. That's all they do. That simple logic allows evolving systems to solve seemingly any challenge ..... by throwing more nested layers of the same logic at whatever options emerge.
Why can't we teach this simple paradigm, to all students, by age 10?